Airbnb's Terms of Service are grossly unfair and potentially illegal. Join the fight.
Airbnb's Terms of Service are grossly unfair and potentially illegal. Join the fight.
"Alone we can do so little; together we can do so much." – Helen Keller
On March 14th, Airbnb retroactively changed its terms of service agreement despite a contractual obligation to Hosts, which provided them a 30-day waiting period before any changes took effect. Hosts learned of the policy shift from news reports that day. The very next morning, funds were withdrawn from the host’s accounts. This pattern repeated itself as Airbnb continued to announce new changes that were designed to win the hearts of the travelers at the Host’s expense. As of posting, Airbnb issued over $2 Billion in refunds. In April, Airbnb announced more changes and begun issuing refunds in the form of Travel Credits, which could be used anywhere in the world. The said credit will expire 12 months from the date of issuance. Unused credits will be converted to unearned revenue and will end up increasing the company’s IPO. Even extremely conservative 20% estimates of unused credits will add $400 Million to Airbnb’s profits.
Airbnb Hosts Collective and Enrico Schaefer, a litigation attorney specializing in the global protection of business interests, are committed to organizing and supporting more than 10,000 Hosts from all over the world who demand better working conditions, transparency and accountability from their once partner – Airbnb.
Arbitration + Class Action Case = Change. We have created a self-help platform to guide Hosts around the world to file individual arbitration claims against Airbnb. The cost to file - $350.00. We have started a class action which is being filed in California Federal Court. You can learn more about the attorneys and law firm filing the class action and join the Airbnb Class Action here.
How did all of this happen?
Airbnb offers both Hosts and Guests options with regard to their cancellation policies. Both the Travelers and the Homeowners were able to choose which option would suit them best. The host was able to pick between “Flexible” and “60 Super Strict” cancelation policies, while the Traveler was able to search for lodging based on their preferences of such policies. Often the price of lodging varied based on their selections, with the “Flexible” cancelation policy homes accruing a premium rental rate than those with a “Strict” policy. The Flexible Policy would permit the Guest to cancel up to 24 hours before arrival and get a full refund. A “60 Super Strict” policy would only allow the guest to receive a 50% refund if the reservation is canceled less than 60 days before arrival. The contractual obligation between those parties began at the time of the booking.
Airbnb also added an Extenuation Circumstances Policy (ECP) to the terms of service, which would allow a Guest to request a full refund when special circumstances occurred. For example death in the family, severe illness, and Endemic (Example: an outbreak of Malaria in one region). All requests were to be handled on a case by case basis and required documented proof.
On March 14th, Airbnb made an announcement to press, updated their ECP, and began offering Guests full refunds for reservations between March 14th and April 14th, which later extended to June 30th with new policies encouraging refunds happening each month or so.
Amber Carpenter, VRM Intel writer, in her article "Airbnb demonstrates lack of strategic thinking in response to COVID-19" said:
“Only time will tell how the industry will assimilate the behavior of Airbnb during the COVID-19 pandemic. As the youngest major OTA at the table, Airbnb has proven it is prepubescent at best. Emotionally reactive, inexperienced, and proud, Airbnb turned the volatile COVID-19 pandemic into a deceitful public relations game that ensured no winners.
Mercurial strategies litter the timeline of communications and policy announcements from early March to date. As the timeline suggests, the initial pro-guest policy of offering 100 percent cash refunds quickly deteriorated into a convoluted maze of qualifications a guest had to navigate to seek relief. Airbnb refers to hosts as partners, yet when it comes to liability, the Hosts are continuously left unprotected. Travel related interruptions in most aspects of the travel industry are covered under Travel Insurance. For example, most airlines offered full cash refunds only to travelers who purchased travel insurance and credits to those who did not. Airlines are also not required to offer cash refunds unless they themselves cancel the flight. In most cases, they offer credit for a future flight. Airbnb has betrayed the trust of both Hosts and Guests by not acting within their own guidelines and constantly making changes to their ECP without regard to consequences."
The Timeline of endless changes to Airbnb’s Extenuating Circumstances Policy (ECP) and legal arguments include:
- Airbnb did not advise hosts about upcoming mass refunds until they had already made the decision and announced it to the press.
- Airbnb failed to follow its own terms of service by providing 30 days-notice on changes to its policies.
- Airbnb secretly changed ECP terms from “Endemic” to “Epidemic” to push blanket refunds.
- Airbnb created a new policy for Covid-19 in March and retroactively applied it to previously made reservations.
- Airbnb voided the “Strict” and “Super strict” cancellation policies offered by hosts, which are material terms to the contract and are rendered meaningless unless enforced.
- Airbnb failed to follow its own terms and process in handling extenuating circumstances claims. Whereas, -mass approvals of all claims are prohibited by their own terms.
- Airbnb encouraged mass cancelations instead of travel date changes.
- Airbnb changed their policy from cash refunds to Airbnb travel credits, while taking cash funds from hosts.
- Airbnb refused to attach those credits to the original listing and used those funds for needed cash flow.
- Airbnb initiated a new cleaning protocol without any support in how it can be implemented.
The Rental Contract is Between Hosts & Guests: Professional property managers and experienced homeowners began offering travel credits and rescheduling travel dates for up to 24 months as early as February in some regions. The host initiative was terminated by Airbnb’s March 14th announcement of blanket refunds. Rather than supporting hosts in this effort, Airbnb dictated that cash refunds must be issued and - then 4 weeks later begun offering Airbnb’s travel credits, but those credits would not be exclusive to Host’s listings. Amber Carpenter states:
"The irony is that experienced hosts around the world were offering travel credits from the beginning, only to be blindsided by Airbnb’s heavy-handed and short-lived campaign to win the hearts of guests with 100 percent cash refunds. This initial move by Airbnb turned property managers’ gracious offers of travel credits into heated debates with guests who claimed that the “right thing to do would be to give a full refund.”
Confused guests who could not get through to Airbnb were attacking property managers through any means possible and demanding the full refund that Airbnb promised, although the hosts did not have any of their funds. Guests who had cancellation requests that did not meet the constantly evolving Airbnb criteria were left in limbo, trying to navigate the complex process of initiating a special refund request on the Airbnb platform."
As a consequence of Airbnb’s actions, a large percentage of hosts started filing for bankruptcy. By mid-April Airbnb was also experiencing cashflow issues. As stated earlier, their next solution was to offer refunds in the form of travel credits that could be used at any Airbnb listing around the world. They also extended the policy to allow travel credits to be used at “experiences” such as wine tastings, guided tours, and yoga sessions. Many of those travel credits will go unclaimed by Guests, taking into consideration the vulnerable state of the travel industry for the next 12 months. What that percentage will be is yet to be determined. However, even extremely conservative estimates of 20% will equal to $400 Million Dollars. Those unused credits will not be refunded to Hosts, from whom the money was taken, rather it will be converted to unearned revenue for Airbnb, and end up on their Profit and Loss statement at the end of the fiscal year.
The cumulative effect of these changes has disrupted the vacation rental industry and poisoned Airbnb culture. Airbnb’s initial COVID-19 Pro-Guest PR campaign has left both Hosts and Guests with unanswered questions. In April, Airbnb changed its EPC once again and started offering Guests a choice between full cash refund and travel credit. Hosts were conscripted into serving as an extension of Airbnb customer service and were forced to approve Guest’s requests for full refunds. However, by doing so, Hosts would be directly contradicting their various cancelation policies, established at the time of booking. The anger and frustration felt by travelers trying to navigate the complicated policies were redirected at Hosts, whom guests held directly responsible for not receiving the cash refund promised by Airbnb.
After push back from homeowners and property managers, Airbnb set up a $250 Million Dollar Relief Fund for hosts. Before the avalanche of changes from Airbnb, the Host and the Guest agreed to accept a 50% loss from the canceled booking: with “Strict’ and “Super Strict” cancelation policies. The change to EPC now allowed Guest to receive a full refund while giving the Hosts only 12.5% of the canceled booking from the fund. This humiliating gesture was announced at the same time, as Airbnb’s extension of the new COVID-19 refund policy, which allowed Airbnb to continue withdrawing funds from Hosts accounts for an additional eight weeks. In order for Hosts to become eligible for the Relief Fund, the Guest had to agree to accept the Airbnb Travel Credit. In the event, the traveler demanded a full cash refund the Host would NOT be able to seek relief from the newly established Fund. At this point, neither hosts nor the guests were informed of the consequences of their decisions leaving Airbnb as the beneficiary.
Airbnb proved one point and one point only; their PR machine is impressive. However, the leadership team is inadequate, inexperienced, and lacks strategic thinking. Airbnb has repeatedly demanded sacrifice from hosts, without notice or recompense. This arrangement is no longer acceptable.
Airbnb Hosts Collective is calling for the following:
- Airbnb must offer travel insurance and eliminate the Extenuating Circumstances policy in its entirety.
- Airbnb must provide better communication, transparency, as well as accountability to hosts as full and equal partners.
- Airbnb must refund Hosts all COVID-19 related cancelations under Strict and Super Strict cancelation policy
Airbnb terms of service prohibit hosts from filing a class-action suit. However, it does not prohibit hosts from collectively demanding better terms or even accountability to the previously agreed terms of service. By joining Airbnb Hosts Collective, you will have access to a self-help platform and will be able to file an arbitration claim for COVID-19 refunds from Airbnb.
"Great things in business are never done by one person; they're done by a team of people." – Steve Jobs
Whether you have one rental property or manage hundreds, we ask you to stand united behind these demands. Airbnb Hosts Collective is committed to organizing and supporting 10,000 hosts ready to file an arbitration claim against Airbnb. The cost to submit an arbitration claim is only $350.00. No other contingency fees apply to this action. Our platform provides supporting videos to guide Hosts through the arbitration and discovery process.
We ask you to join our Facebook group, and spread the word to other Airbnb hosts by sharing this campaign on your social media. We will continue posting updates and pledge to keep you informed of all changes Airbnb will inevitably continue to make. Together, we can affect changes that will provide security and accountability to the community of Airbnb homeowners and property managers. Please join our Facebook group and let’s make history together.